CATASTROPHIC ECONOMICS The predators of New Orleans After the criticism of his disastrous handling the Katrina disaster, President George Bush promises a reconstruction programme of $200bn for areas destroyed by the hurricane.

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The predators of New Orleans

After the criticism of his disastrous handling the Katrina

disaster, President George Bush promises a reconstruction

programme of $200bn for areas destroyed by the hurricane

But the first and biggest beneficiaries will be businesses

that specialise in profiting from disaster, and have already

had lucrative contracts in Iraq; they will gentrify New

Orleans at the expense of its poor, black citizens.


THE tempest that destroyed New Orleans was conjured out of

tropical seas and an angry atmosphere 250km offshore of the

Bahamas. Labelled initially as "tropical depression 12" on

23 August,

it quickly intensified into "tropical storm

Katrina", the eleventh named storm in one of the busiest

hurricane seasons in history. Making landfall near Miami on

24 August, Katrina had grown into a small hurricane,

category one on the Saffi
Simpson hurricane scale, with 125

km/h winds that killed nine people and knocked out power to

one million residents.

Crossing over Florida to the Gulf of Mexico where it

wandered for four days, Katrina underwent a monstrous and

ly unexpected transformation. Siphoning vast quantities

of energy from the Gulf's abnormally warm waters, 3°C above

their usual August temperature, Katrina mushroomed into an

awesome, top
scale, class five hurricane with 290

km/h win
ds that propelled tsunami
like storm surges nearly

10m in height. The journal Nature later reported that

Katrina absorbed so much heat from the Gulf that "water

temperatures dropped dramatically after it had passed, in

some regions from 30°
C to 26°C" (1). Horrified

meteorologists had rarely seen a Caribbean hurricane

replenish its power so dramatically, and researchers debated

whether or not Katrina's explosive growth was a portent of

global warming's impact on hurricane inte

Although Katrina had dropped to category four, with 210

km/h winds, by the time it careened ashore in Plaquemines

Parish, Louisiana, near the mouth of the Mississippi river

on early 29 August, it was small consolation to the doo

oil ports, fishing camps and Cajun villages in its direct

path. In Plaquemines, and again on the Gulf Coast of

Mississippi and Alabama, it churned the bayous with

relentless wrath, leaving behind a devastated landscape that

looked l
ike a watery Hiroshima.

Metropolitan New Orleans, with 1.3 million inhabitants, was

originally dead centre in Katrina's way, but the storm

veered to the right after landfall and its eye passed 55km

to the east of the metropolis. The Big Ea
sy, largely under

level and bordered by the salt
water embayments known as

Lake Pontchartrain (on the north) and Lake Borgne (on the

east), was spared the worst of Katrina's winds but not its


driven storm surges f
rom both lakes broke through

the notoriously inadequate levees, not as high as in more

affluent areas, which guard black
majority eastern New

Orleans as well as adjacent white blue
collar suburbs in St

Bernard Parish. There was no warning a
nd the rapidly rising

waters trapped and killed hundreds of unevacuated people in

their bedrooms, including 34 elderly residents of a nursing

home. Later, probably around midday, a more formidable

floodwall gave way at the 17th Street Canal
, allowing Lake

Pontchartrain to pour into low
lying central districts.

Although New Orleans's most famous tourist assets, including

the French Quarter and the Garden District, and its most

patrician neighbourhoods, such as Audubon Park, a
re built on

high ground and survived the inundation, the rest of the

city was flooded to its rooftops or higher, damaging or

destroying more than 150,000 housing units. Locals promptly

called it "Lake George" after the president who failed

build new levees or come to their aid after the old ones had


Inequalities of class and race

Bush initially said that "the storm didn't discriminate", a

claim he was later forced to retract: every aspect of the

catastrophe was shaped by inequalities of class and race.

Besides unmasking the fraudulent claims of the Department of

Homeland Security to make Americans safer, the shock and awe

of Katrina also exposed the devastating consequences of

federal neglect of majority black and Latino big cities and

their vital infrastructures. The incompetence of the Federal

Emergency Management Agency (Fema) demonstrated the folly of

entrusting life
death public mandates to clueless

itical appointees and ideological foes of "big

government". The speed with which Washington suspended the

prevailing wage standards of the Davis
Bacon Act (2) and

swung open the doors of New Orleans to corporate looters

such as Halliburton,

the Shaw Group and Blackwater Security,

already fat from the spoils of the Tigris, contrasted

obscenely with Fema's deadly procrastination over sending

water, food and buses to the multitudes trapped in the

stinking hell of the Louisiana S

But if New Orleans, as many bitter exiles now believe, was

allowed to die as a result of governmental incompetence and

neglect, blame also squarely falls on the Governor's Mansion

in Baton Rouge, and especially on City Hall on Pe

Street. Mayor C Ray Nagin is a wealthy African

cable television executive and a Democrat, who was elected

in 2002 with 87% of the white vote (3).

He was ultimately responsible for the safety of the

estimated quarter of t
he population that was too poor or

infirm to own a car. His stunning failure to mobilise

resources to evacuate car
less residents and hospital

patients, despite warning signals from the city's botched

response to the threat of Hurricane Iva
n in September 2004,

reflected more than personal ineptitude: it was also a

symbol of the callous attitude among the city's elites, both

white and black, toward their poor neighbours in backswamp

districts and rundown housing projects. Inde
ed, the ultimate

revelation of Katrina was how comprehensively the promise of

equal rights for poor African
Americans has been dishonoured

and betrayed by every level of government.

A death foretold

The death of
New Orleans had been forewarned; indeed no

disaster in American history had been so accurately

predicted in advance. Although the Homeland Security

Secretary, Michael Chertoff, would later claim that "the

size of the storm was beyond anythi
ng his department could

have anticipated," this was flatly untrue. If scientists

were surprised by Katrina's sudden burgeoning to super

dimensions, they had grim confidence in exactly what New

Orleans could expect from the landfall of

a great hurricane.

Since the nasty experience of Hurricane Betsy in September

1965 (a category three storm that inundated many eastern

parts of Orleans Parish that were drowned by Katrina), the

vulnerability of the city to wind
driven sto
rm surges has

been intensively studied and widely publicised. In 1998,

after a close call with Hurricane Georges, research

increased and a sophisticated computer study by Louisiana

State University warned of the "virtual destruction" of the

city by a category four storm approaching from the

southwest (4).

The city's levees and stormwalls are only designed to

withstand a category three hurricane, but even that

threshold of protection was revealed as illusory in computer

simulations last year by the Army Corps of Engineers. The

continuous erosion of southern Louisiana's barrier islands

and bayou wetlands (an estimated annual shoreline loss of

100 sq km) increases the height of surges as they arrive


New Orleans, while the city, along with its levees, is

slowly sinking. As a result even a category three, if slow

moving, would flood most of it (5). Global warming and

level rise will only make the "Big One", as folks in New

like their counterparts in Los Angeles, call the

local apocalypse, even bigger.

Lest politicians have difficulty understanding the

implications of such predictions, other studies modelled the

exact extent of flooding as well as the expecte
d casualties

of a direct hit. Supercomputers repeatedly cranked out the

same horrifying numbers: 160 sq km or more of the city under

water with 80
100,000 dead, the worst disaster in United

States history. In the light of these studies, Fem
a warned

in 2001 that a hurricane flood in New Orleans was one of the

three mega
catastrophes most likely to strike the US in the

near future, along with a California earthquake and a

terrorist attack on Manhattan.

Shortly afterwards,
the magazine Scientific American

published an account of the flood danger ("Drowning New

Orleans", October 2001) which, like an award
winning series

("The Big One') in the local newspaper, the Times

in 2002, was chillingly accurat
e in its warnings. Last year,

after meteorologists predicted a strong upsurge in hurricane

activity, federal officials carried out an elaborate

disaster drill ("Hurricane Pam") that re
confirmed that

casualties would be likely to be in the
tens of thousands.

The Bush administration's response to these frightening

forecasts was to rebuff Louisiana's urgent requests for more

flood protection: the crucial Coast 2050 project to revive

protective wetlands, the culmination of a de
cade of research

and negotiation, was shelved and levee appropriations,

including the completion of defences around Lake

Pontchartrain, were repeatedly slashed.

Washington at work

In part, this was a consequence o
f new priorities in

Washington that squeezed the budget of the Army Corps: a

huge tax cut for the rich, the financing of the war in Iraq,

and the costs of "Homeland Security". Yet there was

undoubtedly a brazen political motive as well: New


is a black
majority, solidly Democratic city whose voters

frequently wield the balance of power in state elections.

Why would an administration so relentlessly focused on

partisan warfare seek to reward this thorn in Karl Rove's

side by authorising the $2.5bn that senior Corps officials

estimated would be required to build a category five

protection system around the city? (6).

Indeed when the head of the Corps, a former Republican

congressman, protested in 2002

against the way that

control projects were being short
changed, Bush

removed him from office. Last year the administration also

pressured Congress to cut $71m from the budget of the

Corps's New Orleans district despite warnings of ep

hurricane seasons close at hand.

To be fair, Washington has spent a lot of money on

Louisiana, but it has been largely on non

public works that benefit shipping interests and hardcore

Republican districts (7). Besi
des underfunding coastline

restoration and levee construction, the White House

mindlessly vandalised Fema. Under director James Lee Witt

(who enjoyed Cabinet rank), Fema had been the showpiece of

the Clinton administration, winning bipartis
an praise for

its efficient dispatch of search and rescue teams and prompt

provision of federal aid after the 1993 Mississippi River

floods and the 1994 Los Angeles earthquake.

When Republicans took over the agency in 2001, it was

ted as enemy terrain: the new director, former Bush

campaign manager Joe Allbaugh, decried disaster assistance

as "an oversized entitlement programme" and urged Americans

to rely more upon the Salvation Army and other faith

groups. Al
lbaugh cut back many key flood and storm

mitigation programmes, before resigning in 2003 to become a

paid consultant to firms seeking contracts in Iraq.

(An inveterate ambulance
chaser, he recently reappeared in

Louisiana as an insid
er broker for firms looking for

lucrative reconstruction work in the wake of Katrina.)

Since its absorption into the new Department of Homeland

Security in 2003 (with the loss of its representation in the

cabinet), Fema has been repeatedly

downsized, and also

ensnared in new layers of bureaucracy and patronage. Last

year Fema employees wrote to Congress: "Emergency managers

at Fema have been supplanted on the job by politically

connected contractors and by novice employees w
ith little

background or knowledge" (8).

A new Maginot Line

A prime example was Allbaugh's successor and protégé,

Michael Brown, a Republican lawyer with no emergency

management experience, whose previous job was

the wealthy owners of Arabian horses. Under Brown, Fema

continued its metamorphosis from an "all hazards" approach

to a monomaniacal emphasis on terrorism. Three
quarters of

the federal disaster preparedness grants that Fema fo

used to support local earthquake, storm and flood prevention

has been diverted to counter
terrorism scenarios. The Bush

administration has built a Maginot Line against al

while neglecting levees, storm walls and pumps.

re was every reason for anxiety, if not panic, when the

director of the National Hurricane Centre in Miami, Max

Mayfield, warned Bush (still vacationing in Texas) and

Homeland Security officials in a video
conference on 28

August that Katri
na was poised to devastate New Orleans. Yet

Brown, faced with the possible death of 100,000

exuded breathless, arrogant bravado: "We were so

ready for this. We planned for this kind of disaster for

many years because we've always kn
own about New Orleans."

For months Brown, and his boss Chertoff, had trumpeted the

new National Response Plan that would ensure unprecedented

coordination amongst government agencies during a major


But as floodwaters swallowe
d New Orleans and its suburbs, it

was difficult to find anyone to answer a phone, much less

take charge of the relief operation. "A mayor in my

district," an angry Republican congressman told the Wall

Street Journal, "tried to get supplies
for his constituents,

who were hit directly by the hurricane. He called for help

and was put on hold for 45 minutes. Eventually, a bureaucrat

promised to write a memo to his supervisor" (9).

Although state
art communications were sup
posedly the

backbone of the new plan, frantic rescue workers and city

officials were plagued by the breakdown of phone systems and

the lack of a common bandwidth.

At the same time they faced immediate shortages of the

critical food rat
ions, potable water, sandbags, generator

fuel, satellite phones, portable toilets, buses, boats, and

helicopters, Fema should have pre
positioned in New Orleans.

Most fatefully, Chertoff inexplicably waited 24 hours after

the city had been
flooded to upgrade the disaster to an

"incident of national significance", the legal precondition

for moving federal response into high gear.

Far more than the reluctance of the president to return to

work, or the Vice
President, Dick Chen
ey, to interrupt a

hunting trip, or the Secretary of State, Condoleezza

Rice, to end a shoe
buying expedition in Manhattan, it was

the dinosaur
like slowness of the brain of Homeland Security

to register the magnitude of the disaste
r that doomed so

many to die clinging to their roofs or hospital beds.

Lathered in premature, embarrassing praise from Bush for

their heroic exertions, Chertoff and Brown were more like


As late as 2 September, Chertoff as
tonished an interviewer

on National Public Radio by claiming that the scenes of

death and desperation inside the Superdome, which the world

was watching on television, were just "rumours and

anecdotes". Brown blamed the victims, claiming th
at most

deaths were the fault of "people who did not heed evacuation

warnings", although he knew that "heeding" had nothing to do

with the lack of an automobile or confinement in a


Despite claims by the Secretary of Defence
, Donald Rumsfeld,

that the tragedy had nothing to do with Iraq, the absence of

more than a third of the Louisiana National Guard and much

of its heavy equipment crippled rescue and relief operations

from the outset. Fema often obstructed r
ather than

facilitated relief: preventing civilian aircraft from

evacuating hospital patients and delaying authorisations for

state National Guard and rescue teams to enter the

area. As an embittered representative from devastated St

Bernard Parish told the Times
Picayune: "Canadian help

arrived before the US Army did" (10).

A conservative New Jerusalem

New Orleans City Hall could have used Canadian help: the

emergency command centre on its ninth
floor was put out of

operation early in the emergency by a shortage of diesel to

run its backup generator. For two days Nagin and his aides

were cut off from the outside world by the failure of both

their landlines and cellular phones. This

collapse of the

city's command
control apparatus is puzzling in view of

the $18m in federal grants that the city had spent since

2002 in training exercises to deal with such contingencies.

Even more mysterious was the relationship betw
een Nagin and

his state and federal counterparts. As the mayor later

summarised it, the city's disaster plan was: "Get people to

higher ground and have the feds and the state

supplies to them." Yet Nagin's Director of Homeland

Security, Colonel Terry Ebbert, astonished journalists with

the admission that "he never spoke with Fema about the state

disaster blueprint" (11).

Nagin later ranted with justification about Fema's failure

to pre
position supplies or to ru
sh buses and medical

supplies promptly to the Superdome. But evacuation planning

was, above all, a city responsibility; and earlier planning

exercises and surveys had shown that at least a fifth of the

population would be unable to leave wi

assistance (12). In September 2004 Nagin had been

roundly criticised for making no effort to evacuate poor

residents as their better
off neighbours drove off before

three Hurricane Ivan (which fortunately veered away


the city at the last moment).

In response, the city produced, but never distributed,

30,000 videos targeted at poor neighbourhoods that urged

residents "Don't wait for the city, don't wait for the

state, don't wait for the Red Cross, leav
e." In the absence

of official planning to provide buses or better, trains,

such advice seem to imply that poor people had to start

walking. But when, after the breakdown of sanitation and

order in the Superdome, hundreds did attempt to esc
ape the

city by walking across a bridge into the white suburb of

Gretna, they were turned back by panicky local police who

fired over their heads.

It is inevitable that many of those left behind in drowning

neighbourhoods will interpre
t City Hall's unconscionable

negligence in the context of the bitter economic and racial

schisms that have long made New Orleans the most tragic city

in the US. It is no secret that its business elites and

their allies in City Hall would li
ke to push the poorest

segment of the population, blamed for high crime rates, out

of the city. Historic public
housing projects have been

razed to make room for upper
income townhouses and a

Mart. In other housing projects, residents a
re routinely

evicted for offences as trivial as their children's curfew

violations. The ultimate goal seems to be a tourist

park New Orleans, Las Vegas on the Mississippi, with

chronic poverty hidden away in bayous, trailer parks and

prisons outside the city limits.

Not surprisingly, some advocates of a whiter, safer city see

a divine plan in Katrina. "We finally cleaned up public

housing in New Orleans," a leading Louisiana Republican

confined to Washington lobbyi
sts. "We couldn't do it, but

God did" (13). Nagin boasted of his empty streets and

ruined neighbourhoods: "This city is for the first time free

of drugs and violence, and we intend to keep it that way."

A partial ethnic cleansing of New Or
leans will be a fait

accompli without massive local and federal efforts to

provide affordable housing for tens of thousands of poor

renters now dispersed across the country in refugee

shelters. Already there is intense debate about transfor

some of poorest, low
lying neighbourhoods, such the Lower

Ninth Ward (flooded again by Hurricane Rita), into water

retention ponds to protect wealthier parts. As the Wall

Street Journal has rightly emphasised, "That would mean

enting some of New Orleans's poorest residents from ever

returning to their neighbourhoods" (14).

Epic political dogfight

As everyone recognises, the rebuilding of New Orleans and

the rest of afflicted Gulf region will b
e an epic political

dogfight. Already Nagin has staked out the claims of the

local gentrifying class by announcing that he will appoint a

member reconstruction commission evenly split between

whites and blacks, although the city is more
than 75%

American. Its "white
flight" suburbs (social

springboards for neo
Nazi David Duke's frightening electoral

successes in the early 1990s) will fiercely lobby for their

cause, while Mississippi's powerful Republican establishm

has already warned that it will not play second fiddle to

Big Easy Democrats. In this inevitable clash of interest

groups, it is unlikely that the city's traditional black

neighbourhoods, the true hearths of its joyous sensibility

nd jazz culture, will be able to exercise much clout.

The Bush administration hopes to find its own resurrection

in a combination of rampant fiscal Keynesianism and

fundamentalist social engineering. Katrina's immediate

impact on the Potom
ac was such a steep fall in Bush's

popularity, and, collaterally, in approval for the US

occupation of Iraq, that Republican hegemony seemed suddenly

under threat. For the first time since the Los Angeles riots

of 1992, "old Democrat" issue
s such as poverty, racial

injustice and public investment temporarily commanded public

discourse, and the Wall Street Journal warned that

Republicans had "to get back on the political and

intellectual offensive" before liberals like Ted Ken

could revive New Deal nostrums, such as a massive federal

agency for flood
control and shoreline restoration along

the Gulf coast (15).

The Heritage Foundation hosted meetings late into the night

at which conservative ideologues,

congressional cadres and

the ghosts of Republicans past (such as Edwin Meese, Ronald

Reagan's former Attorney General) hashed a strategy to

rescue Bush from the toxic aftermath of Fema's disgrace. New

Orleans's floodlit but empty Jackson S
quare was the eerie

backdrop for Bush's 15 September speech on reconstruction.

It was an extraordinary performance. He sunnily reassured

two million victims that the White House would pick up most

of the tab for the estimated $200bn flood d
amage: deficit

spending on a scale that would have given Keynes vertigo.

(It has not deterred him from proposing another huge tax cut

for the super

Bush wooed his political base with a dream list of

after conservativ
e social reforms: school and

housing vouchers (16), a central role for churches, an

urban homestead lottery (17), extensive tax breaks to

businesses, the creation of a Gulf Opportunity

Zone (18), and the suspension of annoying government

regulations (in the fine print these include prevailing

wages in construction and environmental regulations on

offshore drilling).

For connoisseurs of Bush
speak, the speech was a moment of

exquisite déjà vu. Had not similar promises bee
n made on the

banks of the Euphrates? As Paul Krugman cruelly pointed out,

the White House, having tried and failed to turn Iraq "into

a laboratory for conservative economic policies", would now

experiment on traumatised inhabitants of Bilo
xi and the

Ninth Ward (19). Congressman Mike Pence, a leader of the

powerful Republican Study Group which helped draft Bush's

reconstruction agenda, emphasised that Republicans would

turn the rubble into a capitalist utopia: "We want to tur

the Gulf Coast into a magnet for free enterprise. The last

thing we want is a federal city where New Orleans once

was" (20).

Symptomatically, the Army Corps in New Orleans is now led by

the official who formerly oversaw contracts in

Iraq (21). The Lower Ninth Ward may never exist again,

but already the barroom and strip
joint owners in the French

Quarter are relishing the fat days ahead, as the Halliburton

workers, Blackwater mercenaries, and Bechtel engineers leave

their federal paychecks behind on Bourbon Street. As they

say in Cajun,

and no doubt now in the White House too

"laissez les bons temps rouler!"

* Mike Davis is the author of 'The Monster at Our Door. The

Global Threat of Avian

Flu' (New Press, New York, 2005),

'Dead cities, and other tales' (New Press, 2002), 'Late

Victorian holocausts: El Nino famines and the making of the

third world' (Verso, London and New York, 2001), 'Ecology of

fear: Los Angeles and th
e imagination of disaster' (Picador,

London, 2000) and many other works.

Original text in English

(1) Quirin Schiermeier, "The Power of Katrina," Nature,

no 437, London, 8 September 2005.

(2) Editorial note: legislation dating from

the New Deal

obliging public employers to respect the minimum local wage.

(3) Though Louisiana voted for Bush in 2004 (56.7%), New

Orleans is traditionally Democrat.

(4) Study by engineering professor Joseph Suhayda

described in Rich
ard Campanella, Time and Place in New

Orleans, Gretna, Los Angeles, 2002.

(5) John Travis, "Scientists' Fears Come True as

Hurricane Floods New Orleans", Science, no 309, New York, 9

September 2005.

(6) Andrew Revkin and Christopher D
rew, "Intricate Flood

Protection Long a Focus of Dispute," New York Times, 1

September 2005.

(7) "Katrina's Message on the Corps," New York Times, 13

September 2005.

(8) "Top Fema Jobs: No Experience Required," Los Angeles

9 September 2005.

(9) Congressman Bobby Jindal, "When Red Tape Trumped

Common Sense," Wall Street Journal, 8 September 2005.

(10) Melinda Deslatte, "St Bernard Parish residents

overflow the Capital," Times
Picayune, 12 September 2005.

(11) New York Times, 7 and 11 September 2005.

(12) Tony Reichhardt, Erika Check and Emma Morris,

"After the flood," Nature, no 437, 8 September 2005.

(13) Congressman Richard Baker (Baton Rouge) quoted in

"Washington Wire," Wall Street
Journal, 9 September 2005.

(14) "As Gulf Prepares to Rebuild, Tensions Mount Over

Control," Wall Street Journal, 15 September 2005.

(15) "Hurricane Bush," Wall Street Journal, 15 September


(16) Editor's note: rental vouchers we
re issued, backed

by Congress
approved funds, to 20,000 homeless after the

1994 Los Angeles earthquake to pay for rent anywhere in the


(17) Editor's note: a plan to distribute federal land to

those who would pledge to erect a ho
use on it and could

afford to do so. It is estimated that this would provide

about 4,000 sites for 250,000 displaced people, 125,000 of

whom were renting.

(18) Editor's note: a zone in which relief is related to

private financial initi

(19) "Not the New Deal," New York Times, 16 September


(20) John Wilke and Brody Mullins, "After Katrina,

Republicans Back a Sea of Conservative Ideas," Wall Street

Journal, 15 September 2005.

(21) Editorial, "Mr Bus
h in New Orleans," New York

Times, 16 September 2005.